CBDT Notifies E Assessment and who can carry on Survey under Section 133A of Income Tax

Introduction

CBDT vide Notification F No. 187/3/2020-ITA on 13th August, 2020 directed that all the assessment orders shall hereafter be passed by National e-Assessment Centre through the Faceless Assessment Scheme, 2019.

Finance Minister Nirmala Sitharaman had announced the faceless assessment scheme also known as the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019. This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings.

The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system. The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E-assessment Scheme 2019 & given directions for its implementation.

Important features of the E-assessment Scheme

1. A person shall not be required to appear either personally or through authorised representative for any proceedings before the income-tax authority at the National e-assessment Centre or Regional e-assessment Centre or any unit set up under this Scheme.
2. If a modification is proposed in the draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show-cause as to why the assessment should not be completed as per the draft assessment order, the assessee or his authorised representative, shall be entitled to seek personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit under this Scheme.
3. Such hearing shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony.
4. Any examination or recording of the statement of the assessee or any other person (other than statement recorded in the course of survey under section 133A of the Act) shall be conducted by an income-tax authority in any unit, exclusively through video conferencing, including use of any telecommunication application software which supports video telephony.
5. The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, to ensure that the assessee, or his authorized representative, or any other person is not denied the benefit of this Scheme merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing at his end.

Order under section 119 of the Income-tax Act, 1961 dated 13^th August, 2020 pertaining to e-assessment

With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax-administration. Keeping the same in mind, CBDT issued an order under Section 119 pertaining to assessment orders.

Section 119 of the Income Tax Act, empowers the Central Board of Taxes (CBDT) to issue instructions to lower level of authorities. In addition, section 119(2)(b) empowers CBDT to direct income tax authorities to allow any claim for exemption, deduction, refund and any other relief under the income tax act even after the expiry of the time limit to make such claim.

In order to ensure that all the assessment orders are passed through the Faceless Assessment Scheme, 2019, CBDT in exercise of powers under section 119 of the Income-tax Act, 1961 directed that all the assessment orders shall hereafter be passed by National e-Assessment Centre through the Faceless Assessment Scheme, 2019.

However the above order shall not be applicable to the below mentioned cases:-

1. Assessment orders in cases assigned to Central Charges
2. Assessment orders in cases assigned to International Tax Charges.

CBDT also issued order u/s 119 of Income Tax Act directing officers to exclusively act as “Income Tax Authorities”

With the launch of the Faceless Assessment Scheme 2019, the Income Tax department is moving towards minimal interface with the taxpayers, aiming at significant improvement in delivery of services and greater transparency in the working of the department.

Survey in a wider sense means to scrutinize or to inspect. The power of survey under the Income tax Act has been provided under Section 133A and Section 133B. Survey u/s 133A of the Act being an intrusive action, it is expected that the same should be carried out with utmost responsibility and accountability.

Central Board of Direct Taxes, in exercise of powers under section 119 of the IT Act, 1961 directed that the officers posted in Directorates of Investigation (Investigation Wing) and Commissionerate’s of TDS, only and exclusively shall act as “Income-tax Authority” for the purposes of power of survey under section 133A of the Income-tax Act.

The competent authority for approval of such survey  action u/s 133A of the Act shall henceforth be DGIT(Inv) for investigation wing and Pr. CCIT /CCIT (TDS) for TDS charges , as the case may be.

The Income-tax Act gives very wide powers to an authorised officer to carry out the search and also to seize documents and unaccounted assets. The authorised officer has the power to:

1. Enter and search any building, place, etc. where he has reason to suspect that books of account, other documents, money, bullion, jewellery or other valuable article or thing representing undisclosed income is kept;
2. Break open the locks, where the keys thereof are not available;
3. Carry out personal search of the person who is suspected to have secreted some item as mentioned in a) above;
4. Seize the items as mentioned in a) above;
5. Place marks of identification and take extracts or copies of the books of account and other documents; and
6. Make a note or inventory of the valuables found during the search.
7. The authorised officer is also permitted to pass orders placing prohibition on the person in possession or control of the valuable article or thing from removing, parting with or otherwise dealing with such article or thing without prior permission.
   The authorised officer also has the right to demand the services of any Police officer or any officer of the Central Government
8. The authorised officer cannot seize stock-in-trade of a business and he can only make a note of inventory of such stock-in-trade.

Prior to the above order passed by CBDT, survey action could not be taken by Assistant Director, or Deputy Director or Assessing Officer or Tax Recovery Officer without obtaining approval of Joint Commissioner or Joint Director.

However, now survey can only be carried out only by DGIT(Inv) for investigation wing and Pr. CCIT /CCIT (TDS) for TDS charges, as the case may be. This is a welcome change as the powers now can be only higher authority. This would in turn lead to effective accountability and improved efficiency in the survey process.

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